The Netbook Risk Factor

The headline for a Reuters report by Kelvin Soh on the just-released Acer quarterly results cited the "risks of cheap netbooks." The nature of the risk could be summarized in a single sentence:

Acer, the world's No. 3 PC brand, reported weaker quarterly results even as it sold more PCs, underscoring how its low-cost netbooks are cannibalizing into its more expensive products.

This got me to thinking about my own decision to purchase a netbook for the trip back East that I made at the beginning of this month. When netbooks were first announced, I thought about the fact that my only computer was a pre-Lenovo ThinkPad. It has been serving me very well, but I put a lot of effort into configuring it for the service I needed. I really did not want to risk taking it on an extended trip, during which I wanted to keep up my blogging and Examiner.com writing. At the same time I also did not want to sink money into a new laptop that I could configure the same way, particularly when I could not see anything around that I particularly liked. The netbook struck me as a cheap item whose loss would not be a great crisis but with the benefit of providing me with the bare minimum of functionality that I wanted while on the road.

I happened upon an Acer by accident, because my wife and I went into a Radio Shack to ask some questions about wireless modems. I had seen a few netbooks on other shelves; but the Acer was the first one I saw that supported both WiFi and a "wired" Ethernet connection. It came with XP and a bare minimum of applications, and the price was definitely within my window of reasonableness. It seemed worth the risk.

Having now made the trip, I would say that it was worth the risk. The small keyboard was awkward. (Readers probably saw an increase in typographical fumbles while I was on the road.) However, I had no trouble reading my RSS feeds over WiFi signals in airport waiting areas; and I brought my own Ethernet cable to apply to any connection I could use. Since I had such connections in both of the cities I visited (Portland and Pittsburgh), I ended up managing quite well. I even used the Ethernet connection for a first look at a video streaming from Classical TV to consider an idea for an Examiner.com piece I wanted to write about Igor Stravinsky and was able to start making my plans on the basis of that viewing.

Nevertheless, the bottom line is that I bought the netbook because it was cheap. I did not want to do very much with it, so I did not want to make much of an investment. Thus, my particular purchase did not amount to "cannibalizing" the laptop market. I really did not want to spend laptop prices because I really did not want full laptop functionality. My guess is that, at a time when just about all of us attach great value to living frugally, replacing a laptop that is doing its job very well is out of the question. Spending far less to avoid the risk of bringing that laptop to harm over an extended trip, on the other hand, seemed more sensible.

My guess is that the netbook market will not thrive, simply because its appeal is too limited. I would also guess that efforts to package it with a G3 plan will also not get that far. You do not choose to spend less money in order to spend more on your cellular provider. On the other hand, as one who needed support for doing a fair amount of writing, the netbook was clearly preferable to any of the cell phone alternatives for connection to the Internet! However, since writing for me is still at the level of extended essays, rather than Tweets, I suspect that there are not enough folks like me to make the netbook market any more viable than it already is!